Candidates Bash Citizens, Gallagher Criticizes Crist at Forum

Citizen’s Property Insurance is a mess. So is Florida’s homeowners insurance market in general.

All four major gubernatorial candidates, two Republicans and two Democrats, agreed on those points Sunday in Doral, Fla. during a forum sponsored by the Greater Miami Chamber of Commerce. But some differences emerged as they talked about the situation and how to improve it, particularly between Republicans Tom Gallagher and Charlie Crist.

Gallagher, the state’s CFO and former Insurance Commissioner, accused Attorney General Crist of not telling the truth and giving a meaningless “one-liner” when the candidates were asked about what they would do about sharply rising costs of homeowners insurance.
Crist said Citizens, the state-created company that provides property insurance when private companies won’t, was under a grand jury investigation.

“If we’re going to stay in the insurance business as a state, it’s got to be done right, it’s got to be done fair, and it’s got to be done ethically.”
Crist also said he would create competition by forcing companies to sell property insurance in Florida if they are selling other forms of insurance.

“They want to come here and just do the auto and not have the homeowners. What we ought to say to them is ‘If you want to come here for the good stuff, you’ve got to be here for the tough stuff too,'” Crist said.

Gallagher then began answering a question about education by criticizing Crist for the grand jury remark, explaining that a former Citizens’ employee, chief operating officer R. Paul Hulsebusch, is under investigation, not the company.

“He should know it’s untrue for two reasons. One, he’s part of the investigation, he’s the attorney general. And two, he was sent a letter by the (Citizens) chairman … explaining to him that it was never and it is not now under investigation,” Gallagher said.
In his closing remarks, Gallagher took aim at the other remark.

“When it comes to getting rates down and making insurance companies that sell auto sell other kinds, we would have done that a long time ago if it was constitutional,” he said. “People shouldn’t use those one-liners when they ought to know it’s unconstitutional.”
No one argued with one the Crist statement: “Citizens, I think it’s a unanimous consensus that it’s a disaster.”

Gallagher, who as insurance commissioner helped establish Citizens, acknowledged problems with the company, but said it was never designed to insure 1 million homeowners as it now does.

He also told the crowd something it probably didn’t want to hear: Rising rates caused by eight hurricanes in two years aren’t coming down.

“When you have a $30 billion payout in a 15 month period and the weather service telling us we’ve got 10 more years of this very same thing, we’re not going to see any way to get it down in general. We’re going to see the increases that have come stay,” he said.

State Sen. Rod Smith criticized the way the Republican-led Legislature approached the insurance problem during the 60-day session that ended earlier this month. A bill was passed attempting to bail out Citizens while enticing private insurance to Florida. Even supporters had little positive to say about it and admitted that it may not work.

“The plan they came up with the first day, and this was the Republican leadership, was so bad they couldn’t sell it, so they decided to bring it up the last day,” Smith said.

What lawmakers ignored was a plan he and other Democrats supported in which the state would insure up to the first $100,000 of windstorm damage and private insurers would cover anything above that.

His opponent in the Democratic primary, U.S. Rep. Jim Davis, said he wants to work toward having the federal government help ease the burden for Florida by setting up a national catastrophic fund.

Davis said he agreed with Gallagher that Citizens was never supposed to be as large as it is.

“The problem is we haven’t done anything to change the way Citizens does business. It was a mistake to put good money, our tax dollars, after bad,” Davis said. “Citizens is undercharging folks that have a home of $1 million or more, in some cases by 50 percent, and the rest of us are paying for that.”